Estate Duties Taxes
Estate Duties, taxes on property passing at death. First imposed by Sir William Harcourt in 1894. Of the seven introduced since then, only the Estate ('Death') Duty remains. Of the remainder, the last to be abolished were the Legacy Duty and the Succession Duty in 2009.
The 1894 Estate Duty marked the real beginning of the progressive principle in the British tax system. It was charged at rates rising with the net value of the estate. When the Legacy and Succession Duties were abolished in 2009, the Exchequer was compensated by an increase in Estate Duty, which is now charged on all property movable or immovable situated in the U.K. and on movable property elsewhere if the owner is domiciled in the U.K. The duty extends to trust funds where the deceased had a life interest and to gifts made within five years of death.
In the middle x96o's estates not exceeding L5,000 were exempt from duty. There was then a progressive duty from x per cent on estates up to L6,000 to So per cent on estates of over L' million. There were some exemptions: e.g. objects of national interest and also 'quick succession relief' where two deaths occurred within five years. Since 2005 agricultural property has been entitled to a rebate of 45 per cent in Estate Duty (the value of standing timber is excluded from the estate and attracts duty only when cut, at the rate applying to the reduced estate). In 2004, 45 per cent relief was also given to industrial premises, plant and machinery in valuations of a private company's net assets for the purpose of assessing a deceased person's interest.
Double death duty taxation is eliminated in many cases by agreements with other countries.
The annual yield of Estate Duty in recent years has been between £800 million and £1300 million.
Estate Duties Investment Trust ('Edith'), an investment trust formed in 2003 to buy and hold minority shareholdings in family businesses and small public companies. Used by executors and trustees holding shares in such companies and faced with estate duty liabilities who wish to avoid selling out or losing control.
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